Porn Infringement Battles Keep the Action Going for Both Sides

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By Anandashankar Mazumdar and Tommy Shen

June 9 — Five years ago, Jeffrey Antonelli was eyeing new opportunities for his law practice when, by chance, he was introduced to a defendant accused of downloading pornographic films in violation of copyright law.

He took on the defense of an Illinois resident facing claims in Florida that he had copied porn using BitTorrent's file-sharing technology, an infringement claim that could potentially put him on the hook for tens of thousands of dollars in damages.

Prenda Law, which brought the copyright claims in Antonelli's first case and was eventually labeled as part of a “porno-trolling collective” by a federal judge, later went out of business amid charges of misconduct.

However, the work didn't dry up. Today, such litigation accounts for about half of the Chicago-based Antonelli Law's business.

And most of those clients are sued by the same adult film maker: Malibu Media LLC, which files more copyright infringement lawsuits than any other company in the country.

Malibu files up to 40 percent of all copyright claims in U.S. federal court, according to a Bloomberg BNA analysis. The company has filed more than 5,000 lawsuits since 2012.

Antonelli estimates he handles about 10 percent of the Malibu defenses nationwide.

Only One Way to Get Infringers to Stop

In 2011, Colette Pelissier Field and her photographer husband, Brigham Field, founded Malibu Media in southern California and began to produce “couples-friendly” adult films distributed through the X-Art.com website.

In court pleadings and testimony, Malibu has said that as of 2013, it was spending $2 million annually to produce films for more than 50,000 subscribers to its website. However, in a single month of that year, Malibu said that more than 300,000 unauthorized copies of its works had been distributed through BitTorrent networks.

“The only way you can get people to stop infringing is through these lawsuits,” Emilie Kennedy, a Florida lawyer who has represented Malibu for more than four years, told Bloomberg BNA.

Until April, Kennedy was with the Miami-based law firm Lipscomb, Eisenberg & Baker PL, which had been supervising Malibu's copyright infringement litigation. She has now moved to the Pillar Law Group of Beverly Hills, Calif., which has taken over Lipscomb's role as of April.

Massive Losses From Piracy

Ever since the advent of the Internet, content creation industries have complained of online infringement. The Council of State Governments estimated in 2011 that copyright infringement cost the national economy $58 billion annually in lost earnings and tax revenue, and affected an industry that employs 19 million people nationwide.

Most copyright holders find it difficult to monitor online piracy. Small copyright holders hardly have the resources to take advantage of notice-and-takedown, the system for having infringing content removed from the Internet, much less what it takes to identify more than a fraction of illicit copies of their works.

Technology can aid copyright holders in tracking down alleged infringers by identifying the computer Internet Protocol addresses of the legions of people who download, although a court order is needed to obtain their identities.

In those situations, companies like Malibu must bring “John Doe” claims in federal court to get Internet service providers to unlock the names of those accused of infringement.

Malibu stands out among copyright owners for its propensity to bring claims.

“I think there's no question that Malibu is infringed on a massive scale. It's true that Malibu is not the only one” to be the victim of infringement, Kennedy said, but she wouldn't speculate on why other copyright holders were not engaging in the same level of litigation.

Litigation Creates Business for Defense

Malibu has found a way to make an aggressive litigation program function cost-effectively in a way that has eluded copyright owners in the past. What's more, it has changed the copyright litigation landscape for attorneys like Antonelli, who have adapted their practices to meet an increasing stream of business from clients facing charges that they have infringed Malibu's erotic films.

Antonelli has arrangements with local lawyers in California, Florida, Virginia and New York, and in the Washington, D.C., metropolitan area, who are ready to represent clients facing copyright claims from Malibu, which has its own national network of affiliated local counsel.

High Damages = Pressure to Settle

Using the statutory damages provision of the Copyright Act, Malibu can seek up to $150,000 in damages for each willful infringement.

Because its lawsuits commonly allege infringement of multiple works—sometimes hundreds—defendants are strongly motivated to quickly settle, Antonelli said.

Antonelli argues that Malibu can sustain its vigorous litigation program for the simple reason that almost all its defendants settle without a court battle. If just a few pursued their cases in court, Malibu would have a hard time keeping up.

“If just a relatively small percentage pushed back, they’d be hard-pressed to keep it going,” Antonelli said.

Malibu Is Subject of Activists' Ire

The fact that a single plaintiff—Malibu—is responsible for an outsized percentage of copyright infringement lawsuits is controversial among online activists who favor fewer restrictions on intellectual property and a more open Internet.

They say Malibu is hunting for and extorting money from people who are motivated to settle because they fear being dragged into court, exposed as a downloader of pornography, and are terrified of the chance they'll be found liable for hundreds of thousands of dollars in statutory damages.

Malibu rejected this characterization.

“The last thing that Colette and her husband Brigham want is for people to be embarrassed by their content. They certainly don't want to shame their users,” Kennedy told Bloomberg BNA.

She said that Malibu has instructed its lawyers not to oppose any defendant's bid to proceed in a case anonymously.

When seeking a court's permission to subpoena an ISP for information about a subscriber, Malibu has included in its own request language suggesting that the court may issue a protective order to prevent public disclosure of the defendant's identity.

“We want to litigate in good faith and not have that hanging over us,” Kennedy said.

Further, language from at least one of Malibu's court filing states that it doesn't pressure suspected infringers to settle cases before the company goes to court and invites the court to “include language in its Order preventing Plaintiff from initiating settlements with Defendant.”

Litigation Just Keeps Growing

Malibu's litigation program has expanded every year since 2012, growing from 380 complaints in the first year to almost 2,000 in 2015.

Although Malibu isn’t the only major copyright plaintiff in the country, the volume of lawsuits filed by the company dwarfs the number of copyright claims brought by any other single company, Bloomberg BNA data shows.

For instance, the owners of the movies “The Cobbler” (2015), “Manny” (2014), “Dallas Buyers Club” (2013) and “Plastic” (2014) are all frequent copyright litigants. The owners of “Manny” and “The Cobbler” each filed more than 200 copyright infringement lawsuits in 2015. That same year, Malibu filed almost 2,000 such actions.

Malibu Litigation Different From Record Industry's

Malibu's litigation strategy differs from the prominent attack on peer-to-peer music file-sharing mounted by the music recording industry from 2005 to 2008.

Even though the recording industry won several notoriously large legal judgments, it didn't see much of a payday.

Ray Beckerman, a New York lawyer who has represented defendants in more than 30 Malibu lawsuits, estimated that the record industry paid 15 or 20 times in legal fees what it collected from a victory.

Beckerman and Antonelli, among others, say they believe that Malibu, unlike the music industry, must at least be breaking even through settlements, if not actually making a profit.

Malibu Replaces Music as Lead Plaintiff

The record industry also seemed intent on making examples out of a few infringers in order to deter online file-sharing, but ran into a huge public relations backlash.

By the end of 2008, its lawsuits had dropped precipitously. Meanwhile, legal ways of accessing online music developed, creating fewer reasons for listeners to illegally share files.

In 2011, the industry and the Center for Copyright Information announced the creation of the Copyright Alert System in which ISPs agreed to cut off infringing customers after “six strikes.”

Malibu's litigation volume picked up where the music industry left off, according to Bloomberg BNA's data analysis.

“Are they really curbing consumer behavior?” Michael G. Kelber of Neal, Gerber & Eisenberg LLP, Chicago asked. “Clearly, they have it down to a system where it’s sustainable financially.”

Deterrence Requires Volume

“From our experience, if you file a certain number of lawsuits in a particular district, there's no question that the infringement goes down,” Kennedy said. “The more articles there are in the press, the more aware that people are that what they're doing can expose them to liability,” the more deterrence there is.

This kind of deterrence requires a large volume of lawsuits, Kennedy said. “You can't sue one or two people occasionally and expect that to have an effect on the infringement.”

Malibu and its lawyers have worked out a system for years to come, she said. “For now, there's no reason why it can't be sustained long-term.”

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com ; Tommy Shen in Washington at tshen@bna.com

To contact the editor responsible for this story: Mike Wilczek in Washington at mwilczek@bna.com